Omron sets up global controls hub in China

01 June, 2006

Omron has inaugurated a new subsidiary in Shanghai, China, which will serve as its global design and production centre for control components and systems. Omron is investing about $70m in Omron Shanghai (OMS), which will have a staff of around 2,200, and is expected to generate sales worth $320m next year.

The new operation, formed last year by merging three previous Omron businesses in China, will design, develop, produce and provide support services for products such as PLCs, sensors, and temperature controllers. Products will be designed to use materials and parts sourced locally in China where possible.

Omron`s industrial automation business is currently undergoing large-scale restructuring with the aim of strengthening its position as a globally competitive manufacturer. As well as building the Chinese operation, this restructuring will also involve boosting the company`s core technological strengths in Japan.

In the three years to 2007, Omron plans to have invested around $90m in its automation business, split evenly between China and Japan. As a result of the reorganisation, the company hopes to achieve operating margins of around 20% during its 2007 fiscal year.